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Multi-billion assistance package to Australian car industry

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The Australian car industry will be given a multi-billion assistance package by the federal government which could be announced by Monday, The Australian Financial Review reports.

The newspaper says the package will include support in the 2008-09 financial year for the autocomponents sector, which has been gutted by widespread jobs cuts. Redundancies have also fed into the major car companies, with Ford the biggest victim.

It's hoped the package will help boost the sector's ability to obtain finance and boost its competitiveness as the global financial system continues to struggle.

Automakers worldwide have laboured recently as consumers put the brakes on spending.

Local carmakers have specifically been hit by a shift in consumer preference towards more fuel efficient, smaller cars, which was exacerbated by the soaring cost of fuel on a skyrocketing oil price.

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Further the overall Green Car Plan will provide:

• A better-targeted, greener, $3.4 billion assistance program, the Automotive Transformation Scheme (ATS), running from 2011 to 2020;

• Changes to the Automotive Competitiveness and Investment Scheme in 2010, consistent with the Bracks review proposals, to smooth the transition to the ATS ($79.6 million);

• $116.3 million to promote structural adjustment through consolidation in the components sector and to facilitate labour market adjustment;

• $20 million from 2009–10 to help suppliers improve their capabilities and their integration in complex national and global supply chains;

• $6.3 million from 2009–10 for an enhanced market access program;

• A new Automotive Industry Innovation Council, bringing key decision makers together to drive innovation and reform; and

• A $10.5 million expansion of the LPG vehicle scheme, to start immediately, that doubles payments to purchasers of new vehicles using LPG technology

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